Verizon telephone customers in Maryland could see their basic dial-tone service rate increased by $1 a month in July and then frozen for three years if the Public Service Commission approves a proposed settlement between the communications company and the PSC.
The PSC is scheduled to hear testimony on the settlement during hearings Thursday and Friday. The settlement addresses thousands of consumer complaints — missed appointment and long repair times — made about Verizon in 2007 that spurred a PSC investigation into the telephone company.
“We think this settlement is going to be good for Maryland and the basic residential consumer,” William Roberts, Verizon’s regional president, said in an interview with The Examiner. “For three years, your basic dial-tone rate isn’t going to go up.”
Basic telephone service costs can be about $15 per month, and a significant portion of Verizon’s more than 2 million customers have basic telephone service over a “bundle” of communications services, said John Gilbert, Verizon’s vice president of regulatory affairs. After the rate freeze expires in July 2012, Verizon could raise the basic rate by up to $12 each year.
In exchange for providing affordable basic service rates and service improvements, Verizon is seeking pricing flexibility on competitive services that are provided by competitors like Comcast that do not face the same regulatory scrutiny.
“Telecommunications is a very competitive business these days,” Gilbert said. “We need flexibility to price. That’s the most competitive piece of our business.”
The settlement, if approved, would also establish a “Service Quality Incentive Plan” that would immediately pay a total of $1 million to customers who have experienced extended out-of-service conditions and missed appointments.
The settlement puts an additional $4 million or more at risk if Verizon fails to meet service quality standards in the future, while also establishing a program to allow disabled and elderly customers without alternative access to 911 emergency services to pre-certify for priority repair service.
Verizon also would lower the rate that customers in the region pay to avoid long-distance charges — called foreign-exchange service — to areas like Washington and Annapolis. Customers in those areas can pay $14 a month to avoid the added charges. Under the proposed settlement, Verizon would lower that fee to $2 a month for those who subscribe to bundled packages, and the company said “tens of thousands of current and future customers could benefit.”
The PSC began its investigation of service complaints against Verizon in 2007. Consumers filed more than 300 complaints by July of that year about canceled or missed repair appointments and long waits to restore service.
The Office of the People’s Counsel, which represents Maryland consumers, helped negotiate the settlement. A representative from the OPC could not be reached for comment.
